-----Original Message-----
From: Charles Jannuzi [mailto:[EMAIL PROTECTED]]
Sent: 09 October 2002 15:13
To: [EMAIL PROTECTED]
Subject: [PEN-L:31148] Re: employment
>best you could say it was an argument from
>previously established authority
Absolutely, because I have no real specialist knowledge of the subject of
unemployment statistics and no real prospect of having the time to get any.
But look at it this way:
What's the knock-down argument to say that people who only skim want ads
*should* be counted as "actively looking for work"? I haven't heard it.
Same with the long term sick. I don't even understand the argument about
the unemployment rate which seems to be arguing that people who have jobs in
the armed services ought to be counted as unemployed. What I do know is
that there are a lot of people doing good, honest work on this subject,
trying to measure what effect various kinds of non-worker populations have
on the operations of the labour market, and that the most and the best of
them work for the BLS. So in the absence of anyone making a contrary
argument to me, I'm going to assume that the inclusion of these groups makes
the BLS number worse, rather than better, as a measurement of what it's
meant to measure. My understanding of what the BLS unemployment rate is
meant to measure is this: it's meant to measure the number of people who
would be employed if the labour market were to clear at the current
prevailing wage rate, but who are not employed. It's a measure of labour
market disequilibrium.
There are, I think, two further important questions which arise from this,
and part of the reason why we're all talking past each other is that we're
taking these two questions out of order. The questions are:
1) Assuming that "unemployment" is used by the official statisticians to
measure the extent to which the labour market has failed to clear, should it
be measuring something else?
and -- and this can most likely only be answered conditionally on a specific
answer to 1) above --
2) Can adjustments be made to the official statistics in order to transform
the BLS number into something which works well as a measure of whatever it
is that the unemployment rate ought to be naming?
Taking these questions in order, I'm much less sure of my ground than I was
when I decided to stick my oar in. There's a whole menu of different things
which could be reasonably regarded as being named by the words "the
unemployment rate":
a) the number of people not employed due to the labour market not clearing
at the current wage rate and rate of profit
b) the number of people who would be unemployed due to the labour market not
clearing at some other level of the wage rate and rate of profit
(presumably, one which we would regard as "fairer"
c) the entire population of those who could conceivably be press-ganged into
the labour force, minus the employed
d) c) , but minus people who would genuinely choose leisure rather than work
given the current level of social benefits
e) c), but also minus the people who would choose leisure rather than work
given some other (lower or higher) level of social benefits
f) d) or e), but assuming people who "would choose leisure rather than
work" if they were in some Rawlsian state of maximally rational reflective
equilibrium, rather than the choices they might contingently happen to make
-- I think that this is what we're thinking about when we start adding back
"disenchanted workers".
g) any of the above, but adding back in people who have enough non-labour
income not to need to work
------ the above six are all more or less quantifiable people; I would guess
that you could twitch the BLS numbers to give you any of these, albeit that
b), e) and f) would require the making of some fairly tendentious
adjustments and would give you a number useless for discussion with anyone
not already disposed to agree with you. But there is also
h) the number of people who regard their lack of a job as being a bad thing
for them
i) the number of people who regard their lack of a job as being a harm
caused to them by outside agency
j) the number of people who would be better off if they were given a(ny) job
tomorrow
k) the number of people for whom there is some specific job which they could
do, and which it would make them better off if they were given it tomorrow
l) k), but with the constraint that the job must be one which could be
offered to them under some organisation of the economy which meets some
criterion of fairness relative to the currently prevailing organisation
m) variants of all of the above, but defining "job" in a way which does not
necessarily imply participation in the wage economy.
------- it's probably one of the above that one would want to be thinking of
in order to support intuitively attractive propositions like "even one
person unemployed is too much"; it's also what I was twittering on about
when I was talking about the misery of unemployment. I would guess that you
could not twitch the BLS numbers to give you any of the above, although you
could in principle carry out your own survey, and there is a lot of data out
there (divorce rates, suicides, stress-related illnesses) which it would
certainly help you to track over time in order to get some handle on whether
the numbers in the unemployment handbook were giving you a good handle on
the extent to which people are having the experience of being unemployed.
So count me as staking out a "third way" position; I think that it is in
principle possible to take a scientific treatment of the question of
unemployment, but that the BLS numbers don't really give you much of a
useful steer on it (and nor, I emphasise, do the numbers of any other
country, and nor, most likely, do the adjusted and tweaked numbers of
well-meaning left economists). I'd also, as an extension of this, argue
that due to lack of a coherent framework of reporting of the information you
would need in order to keep track of unemployment in the second sense, to
make definite or quantiative statements about unemployment in a real-time
context, as opposed to the historical, is dangerous. I of course say this
in the luxurious position of one who is not generally brought face to face
with any need to make such statements.
*quite* enough from me on this, I think.
dd
PS: Of course in the above I neglect the main use of transforms of US data
to alter the scope of their definitions; their polemical utility in debating
the question of whether the USA's economic model is undeniably superior with
ideologues. They're very useful in this sense and I wholeheartedly
congratulate the people who do the leg-work of producing such useful
rhetorical armaments. But we are among friends and can speak frankly on
PEN-L, can we not?
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